WASHINGTON - No one wants President Bush to honor his no-tax pledge more than Leonard Bickwit, a thrift lawyer defending the controversial "December deals" of 1988.

The government's selling spree of sick savings and loans was made possible by an expiring provision in the tax code that permitted acquirers, including financier Ronald Perelman, to deduct losses even though they were compensated by the federal government.

The practice, which became known as double dipping, was authorized by the Internal Revenue Service under a 1981 law, and by the Federal Savings and Loan Insurance Corp., which negotiated the deals.

Bill Would Repeal Tax Break

An amendment tucked into the tax bill that passed Congress earlier this month would repeal the tax break. President Bush has threatened to veto the bill because it includes provisions that could be construed as tax increases, which would violate his "no new taxes" pledge.

But Congress delayed sending the measure to the White House, meaning the President need not make a decision until after the election.

Lawsuits Threatened

Mr. Bickwit, a partner in Miller & Chevalier here, is worried that the bill will be signed because it has the support of a number of strong interest groups, including home builders and insurance agents.

Mr. Bickwit said thrift operators intend to haul the government into court if they lose the tax advantages. The breaks were in their purchase contracts, he said, and the government has no right to renege, even if some people question the wisdom of the policy in retrospect.

"It's indefensible public policy to undo the law to deny the consideration that was offered" to the savings and loan buyers, said Mr. Bickwit. "We think the law is very clear."

But Dan Crane, a former staffer for Rep. Frank Guarini, R-N.J., who sponsored the repeal amendment, said: "You have no constitutional right to one tax rate forever."

Only Unused Credits at Issue

The provision would not force buyers to repay the government for tax breaks they've already taken, said Mr. Crane, who is with the Washington lobbying firm of Campbell-Raupe. It would prevent them from using unused tax credits.

The Guarini amendment has been under discussion almost since the day the 1988 deals were closed. Mr. Guarini is retiring from Congress this year, and many observers think the issue will not arise again if the bill is vetoed.

Mr. Bickwit said he does not know how much money is involved, even for his client, Pulte Home Corp. However, the Joint Taxation Committee of Congress estimated earlier that the tax break was worth $400 million over the five years through 1995.

The Treasury, which supports Rep. Guarini, acknowledges that the IRS may have given thrift buyers permission to take tax deductions. But nothing in the 1981 law "says you get a tax break for a compensated loss," Mr. Crane said, explaining the Treasury's current position.

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